As Europe Heads on Vacation, Banks Should Not Rest

But as Europe heads out on vacation, investors should stay put and take a closer look at its financial sector, says Francesco Guerrera on The News Hub.

This transcript has been automatically generated and may not be 100% accurate.

... the ... but the new stuff there at the beest live I'm Simon Constable ... how healthy our Europe's banks really well not as healthy as you might think says ... will Street dolls from the stick around and joins us now ... on the site to discuss ... the redneck all of you which businesses the human eye should be on vacation delicately European Axiata yellow should be banned from building going after that so nice that if we do ... but the bank should be they should be working very very hard cousin all as healthy as some people so I think sealing the masses to it we just just to get a bit of context is a lot of euphoria among indexes for European banks into ... the sector of the index is up fourteen percent to four zero lead over the past year and ... we know even seen a European recovery only the green shoots of ... all whiny feel ... it too optimistic so ... there's a lot of have to have any reason I've seen does some stuff than the one that ... people are really quite positive about the European banks that took a look at the well you know maybe it to me so positive they're a lot of ... problems I had not just on the earnings front and center recovery front and front in the balance sheet debt and use the good times and for the bounty ... Hunter and Amigo groove of things like gum from Barclays Bank outdoor Deutsche Bank YouTube ups of the school's finally did on something I mean Baucus English in particular being very reluctant to say the least ... to raise capital ... even Bill regulators affected shareholders with the nanny ... now the Street The but that's because I listened in on the stock price but it sure sure the solution and is also a new line of capital so that when then choose your poison and sold may find they raise their capital last week it's it's all been to be kept as a lot more to be done and ... I think a lot of people press tool to see another state in the appeal ... isn't it true that when you haven't it's the weakest companies that benefit most when when economy touch Brown writes that if this all ADP you define anyway right ... but it but if you like some on the edge to her and suddenly this ... extra cost about ... a hundred percent pop in profits from wet and and European banks in the back to the linguine benefit when you call me yes up an interesting when interest rates go up to the summit of big market so ... it's interesting to see investor think UK While the economy recovers little bit interest rates go up and then they get into the ground level because the European banks that can take off and that's a legitimate idea I think the question is ... you may be getting into early because there's a lot more proud parents come for European banks okay so the deal saying the people at the bank's a monopoly to the but the SNP want banks they are what the Obama can still work hard on raising capital ... and opening on but that none of them occasionally as they get it checked ... I'm glad for just under our rocks for The Wall Street